Bass, Berry & Sims attorney Thad McBride provided insight on the sanctions evasion techniques being used by foreign owners of seemingly legitimate money services businesses (MSBs) to move funds illicitly. The article provides examples of foreign entities – such as those in countries faced with strict U.S. sanctions, such as Iran or North Korea – taking control of MSBs in foreign jurisdictions and then using the ownership status to pass money and convert funds to U.S. dollars. Because entities in sanctioned countries are severely restricted related to the amount of money that can be brought into or moved within the United States, ownership of these MSBs can be a profitable way of avoiding detection.

“In my view, what is most important is international cooperation” to combat this approach, said Thad. “I think it is much easier and more likely for evasion to occur when there is not multilateral agreement about sanctions restrictions and enforcement.”

The full article, “Evolving Sanction Evasion Techniques Put MSBs in the Spotlight,” was published by PaymentsCompliance on August 6, 2018, and is available online (subscription required).